CROSS-MOTIONS FOR SUMMARY JUDGMENT GRANTED IN PART:

CROSS-MOTIONS FOR SUMMARY JUDGMENT GRANTED IN PART:

February 16, 2024

CBCA 6558, 7079

RITA R. WADEL REVOCABLE LIVING TRUST AND 229 JEBAVY ROAD, LLC

dba LUDINGTON INDUSTRIES BUILDING,

Appellant,

v.

GENERAL SERVICES ADMINISTRATION,

Respondent.

Adam D. Bruski, John V. Byl, and Gaëtan Gerville-Réache of Warner Norcross +

Judd LLP, Grand Rapids, MI, counsel for Appellant.

James Scott, Office of General Counsel, General Services Administration,

Washington, DC, counsel for Respondent.

Before Board Judges BEARDSLEY (Chair), KULLBERG, and SULLIVAN.

BEARDSLEY, Board Judge.

Pending before the Board are the parties’ cross-motions for summary judgment. The

appellant moves the Board to find that the General Services Administration (GSA) breached

the covenant not to commit waste by contaminating the leased building and premises at 229

South Jebavy Drive in Ludington, Michigan, and as a result, owes the appellant damages for

the cost of demolishing, rebuilding, and remediating the building and premises. The

appellant also moves for judgment on its claim for holdover rent. GSA moves the Board to

enter judgment finding that damages for waste are limited to the diminution in the fair market

CBCA 6558, 7079

2

value of the building and premises and that the appellant is unable to meet its burden to prove

that the building and premises suffered any diminution in value attributable to contamination

of the premises during the 2007 lease term. GSA also moves for judgment on appellant’s

claims for lost income and holdover rent. We grant the appellant’s motion for summary

judgment in part and GSA’s motion for summary judgment in part. We find that GSA

breached the covenant not to commit waste but that the damages are limited to the

diminution in fair market value of the building and premises. We find that there is a genuine

issue of material fact that precludes summary judgment on the issue of the amount of

damages that the appellant will recover for waste, but we dismiss the appellant’s lost income

and holdover rent claims.

Background

On or about November 19, 2007, GSA entered into a ten-year lease (2007 lease) with

The Rita R. Wadel Revocable Living Trust U/A 2/1/91 and the Bruce F. Wadel Trust No. 1

D/B/A Ludington Industries Building for the building and surrounding premises at 229 South

Jebavy Drive in Ludington, Michigan. This 2007 lease was the last in a series of leases

running from 1957 through 2018 by which GSA leased the building and premises for the use

of the United States Fish and Wildlife Service (FWS). The 2007 lease was amended to

extend through 2018. In 2006, the Bruce F. Wadel Trust No. 1’s leasehold interest in the

building was transferred to the Wadel Family Trust, and in 2009, the parties executed

supplemental lease agreement no. 1 that replaced the Bruce F. Wadel Trust No. 1 with the

Wadel Family Trust as lessor. In November 2018, two months before the lease expired, the

Wadel Family Trust’s interest in the building was transferred for trust reorganization

purposes to 229 Jebavy Road, LLC. The members of 229 Jebavy Road, LLC are the

surviving beneficiaries of the Wadel Family Trust.

Since 1957, FWS has operated the building and premises as a biological station to

combat the infiltration of sea lamprey in the Great Lakes system. FWS stored drums of a

piscicide in the warehouse portion of the building for application at breeding headwaters to

kill lamprey larvae. The active ingredient in this piscicide is 3-triflouromethyl-4-nitrophenol

(TFM or lampricide). At some point during the 1960s and 1970s, dates unknown, significant

amounts of TFM leaked into the building and the surrounding grounds. There is testimony

that the containers were replaced in the 1970s, ending the TFM release, but also speculation

that the leakage continued through the 1980s and 1990s – until a separate storage facility was

built to store the containers of TFM.

Investigations in 1984, 1993, 1994, and 2012 documented on-site TFM residue both

inside and outside of the building. In 2017, the GSA-commissioned Environmental Cleanup

Study Report (report) concluded that there was evidence of TFM in the concrete core

samples, in the storage and handling areas of the premises, and in some portions of the office

CBCA 6558, 7079

3

area. TFM was also found in the soil and groundwater surrounding the building. The

appellant asserts that even though it knew that there was contamination, it did not know the

extent of the contamination until the report was issued in 2017. Despite being aware of the

presence of TFM on the premises, no municipal, state, or federal authority has mandated any

remediation of the premises.

The parties disagree as to whether the building and premises were contaminated with

TFM during the 2007 lease term. GSA asserts that the contamination that occurred prior to

the inception of the 2007 lease continued during the 2007 lease term but “affirmatively

disputes that appellant[] ha[s] established that supplemental contamination occurred during”

the 2007 lease term. GSA contends that even if supplemental contamination occurred, it was

de minimis. The appellant’s witnesses testified, when deposed, that the FWS employees

continued to contaminate the building with TFM by tracking TFM into the building on their

clothing and shoes and by cleaning vehicles, equipment, and protective gear in the building.

Although the carpets in the building were replaced in 2007, there were traces of TFM found

on the new carpet in 2017. Repeated efforts taken by the FWS to remove, contain, or

otherwise render the TFM innocuous have been unsuccessful.

FWS evacuated its office staff from the building in January 2017 due to the dangers

of exposure to TFM and began to only use the building for the storage of TFM. In December

2018, the Government ceased all use of the building. The appellant maintains that because

of the TFM contamination in the building and surrounding land, it has been unable to rent

the building or premises since the Government left. The appellant claims that the building

and the premises are uninhabitable and unusable for any commercial purpose, and it has

valued the premises at zero dollars for property tax purposes. GSA disputes these

conclusions, noting, for example, that a Wadel family member stores a boat on the property

and that the appellant has failed to engage a broker or real estate agent to market the building

or premises. There is no indication that the appellant has made any effort since the 2007

lease expired to restore the property, treat the contamination, or mitigate the damage.

In 2017, FWS estimated a cost of $14,737,823 to demolish the existing building and

parking lot ($595,556), remediate approximately three feet of soil underneath the building

and parking lot ($4,393,172), and design and replace the existing facility and parking lot with

one similar in size and scope ($9,749,095).

The appellant submitted its initial certified claim to the GSA contracting officer in

March 2019. Rita R. Wadel Revocable Living Trust and 229 Jebavy Road, LLC (not the

Wadel Family Trust) submitted the initial claim, and the trustee of each entity certified the

claim. On July 9, 2019, the appellant appealed the deemed denial of the claim to the Board,

which was docketed as CBCA 6558. The Board directed GSA to issue a final decision on

the claim, and GSA issued a final decision on September 11, 2019, denying the claim in full.

CBCA 6558, 7079

4

The final decision was addressed to Rita R. Wadel Living Trust and 229 Jebavy Road, LLC

and responded to the “claim in which Rita R. Wadel Living Trust and 229 Jebavy Road,

LLC, dba Ludington Industries Building (‘Lessor’) seeks compensation.” There was no

mention in the final decision of the Wadel Family Trust or that 229 Jebavy Road, LLC was

not the lessor.

On January 25, 2021, the appellant submitted a claim to GSA for holdover rent. Rita

R. Wadel Revocable Living Trust and 229 Jebavy Road, LLC (not the Wadel Family Trust)

also submitted this second claim, and the trustee of each entity certified the second claim as

well. The holdover rent is an alternative theory of recovery to the lost income theory

submitted in the initial claim. GSA denied the claim on March 10, 2021, and the appellant

appealed the final decision to the Board, which was docketed as CBCA 7079. The final

decision was addressed to Rita R. Wadel Living Trust and 229 Jebavy Road, LLC, and it also

responded to the “claim in which Rita R. Wadel Living Trust and 229 Jebavy Road , LLC,

dba Ludington Industries Building (‘Lessor’) seeks compensation.” There was no mention

in the final decision of the Wadel Family Trust nor did the final decision object to 229

Jebavy Road, LLC as the lessor. The Board consolidated the two appeals.

In the initial appeal, the appellant seeks $15,337,896.14 in damages. This damages

calculation used the FWS’s remediation and rebuilding estimates and applied adjustments

for soil remediation and the age of the building as well as lost income due to the appellant’s

inability to use or rent the building. The appellant claimed holdover rent for two years,1

beginning in 2019, in the amount of $834,118. GSA has provided an affidavit from a

certified real estate appraiser to support a finding that the fair market value of the property

in 2019, if uncontaminated, would be $570,000. The appellant has stated that it does not

“currently have an opinion as to the fair market value of the premises.”

Discussion

The summary judgment standard is well established. Summary judgment is

appropriate when no material facts are in dispute and the moving party is entitled to

judgment as a matter of law. See Rule 8(f) (48 CFR 6101.8(f) (2022)); Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986). A material fact is one that will affect the outcome of the

case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

1

The appellant indicated that the holdover rent of $417,059 dollars per year

would continue to accrue “as long as the Government remains in constructive possession

of the Premises.”

CBCA 6558, 7079

5

“The fact that both parties have moved for summary judgment[,]” as in this

appeal, “does not mean that the [Board] must grant judgment as a matter of

law for one side or the other . . . .” Mingus Constructors, Inc. [v. United

States], 812 F.2d [1387, 1391 (Fed. Cir. 1987)]. Rather, “each motion is

evaluated on its own merits and reasonable inferences are resolved against the

party whose motion is being considered.” Marriott International Resorts, L.P.

v. United States, 586 F.3d 962, 968-69 (Fed. Cir. 2009).

Wu & Associates, Inc. v. General Services Administration, CBCA 6760, 21-1 BCA ¶ 37,965,

at 184,383.

I.

Standing – 229 Jebavy Road, LLC

A party must be in privity with the United States to have standing to sue the Federal

Government under a contract claim. See Southern California Federal Savings & Loan

Assoc’n v. United States, 422 F.3d 1319, 1328 (Fed. Cir. 2005). GSA contends that 229

Jebavy Road, LLC is not a party to the 2007 lease and, therefore, has no standing to pursue

this appeal at the Board. However, “[s]tanding is determined at the time of commencement

of an action.” Summit Commerce Pointe, LLC v. General Services Administration, CBCA

2652, et al., 13 BCA ¶ 35,370, at 173,569 (citing Rothe Development Corp. v. Department

of Defense, 413 F.3d 1327, 1334 (Fed. Cir. 2005)). In order for 229 Jebavy Road, LLC to

have standing in this appeal, “the claims must have been validly assigned” to 229 Jebavy

Road, LLC, and GSA “must have accepted the assignment, constructively or expressly by

agreement, at the time of the appeal.” Id. at 173,570.

GSA argues that the assignment of the Wadel Family Trust’s interest in the lease to

229 Jebavy Road, LLC was invalid under the Anti-Assignment Act, 41 U.S.C. § 6305(a)

(2018), and the Assignment of Claims Act, 31 U.S.C. § 3727. “The Acts serve two primary

purposes – ‘first, to prevent persons of influence from buying up claims against the United

States, which might then be improperly urged upon officers of the Government; and second,

to enable the United States to deal exclusively with the original claimant instead of several

parties.’” ATS Trans LLC v. Department of Veterans Affairs, CBCA 7163, 22-1 BCA

¶ 38,151, at 185,291 (quoting Johnson Controls World Services, Inc. v. United States, 44

Fed. Cl. 334, 343 (1999)). When the “purposes [of the anti-assignment statutes] are not

impinged, a transfer should be allowed to stand.” United International Investigative Services

v. United States, 26 Cl. Ct. 892, 898 (1992); see Keydata Corp. v. United States, 504 F.2d

1115, 1118-19 (Ct. Cl. 1974). Here, there is no risk of fraud or multiple litigants, and the

purposes of the Acts are not impinged.

“Despite the bar created by these statutes, it has been held that the Government may

recognize an assignment as valid, either directly or constructively, through its actions.” John

CBCA 6558, 7079

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Lewinger v. Department of Veterans Affairs, CBCA 4794, 16-1 BCA ¶ 36,413, at 177,545

(quoting Summit Commerce Pointe, LLC, 13 BCA at 173,569). The record indicates that the

contracting officer in both final decisions, and without objection or mention of the Wadel

Family Trust, recognized 229 Jebavy Road, LLC as one-half of the lessor. Thus, we find that

an implied-in-fact novation occurred which effectively substituted 229 Jebavy Road, LLC

for the Wadel Family Trust in the lease. “It is well established . . . that even in situations

where there has not been a formal novation, the Government may still recognize validly a

successor in interest to the original contractor.” Broadlake Partners, GSBCA 10713, 92-1

BCA ¶ 24,699, at 123,270-71 (1991) (citing Albert Ginsberg, GSBCA 9911, 91-2 BCA

¶ 23,784, at 119,127).

The transfer was also valid by operation of law, exempting the assignment from the

Anti-Assignment Acts’ application. ATS Trans LLC, 22-1 BCA at 185,292 (citing

Westinghouse Electric Co. v. United States, 56 Fed. Cl. 564, 569 (2003), aff’d, 97 F. App’x

931 (Fed. Cir. 2004); Lewinger). Transfers by operation of law occur when “the contract

continues with the same entity, but in a different form,” Westinghouse Electric Co., 56 Fed.

Cl. at 569, such as “the passage of claims to heirs and devisees” or “transfers by the

succession of one business entity for another.” Keydata Corp., 504 F.2d at 1118 (citing

Erwin v. United States, 97 U.S. 392, 397 (1878); Consumers Ice Co. v. United States, 475

F.2d 1161, 1163 (Ct. Cl. 1973)). The Wadel Family Trust to 229 Jebavy Road, LLC was

nothing more than a reorganization of trust assets between the same parties and, therefore,

a transfer by operation of law. 229 Jebavy Road, LLC has standing to bring these appeals.

II.

Entitlement

The appellant moves for summary judgment, alleging that GSA breached the covenant

not to commit waste in the building and on the premises and that the appellant is entitled to

the costs necessary to restore the building and premises. GSA moves for summary judgment,

arguing that damages for waste are limited to the diminution in the fair market value of the

building and premises and that the appellant is unable to prove that the building and premises

suffered any diminution in value attributable to contamination of the premises during the

2007 lease term.

There was no restoration clause in the 2007 lease. “Every lease, [however,] contains

a provision, implied if not expressed, that a tenant will not commit waste by damaging the

property, and therefore will, when it vacates leased space, return the space to the landlord in

the same condition in which it received that space, reasonable wear and tear excepted.” A&B

Ltd. Partnership v. General Services Administration, GSBCA 15208, 04-1 BCA ¶ 32,439,

at 160,504-05 (2003) (citing United States v. Bostwick, 94 U.S. 53, 65-66 (1876)). Waste is

“generally defined as ‘the destruction, alteration, misuse, or neglect of property by one in

rightful possession to the detriment of another’s interest in the same property.’” White

CBCA 6558, 7079

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Mountain Apache Tribe v. United States, 249 F.3d 1364, 1379 (Fed. Cir. 2001) (quoting

8 Richard R. Powell & Michael A. Wolf, Powell on Real Property ¶ 636, at 56-3 (2000)),

aff’d, 537 U.S. 465 (2003).

Here, GSA committed waste by returning to the appellant at the end of the lease a

building and premises in a changed condition from when the parties executed the 2007 lease

– a building and premises obviously contaminated with higher levels of TFM than previously

realized. In 2007, the property was considered usable, safe, and rentable, even though both

parties suspected that there was some TFM contamination in the building. The extent of the

contamination worsened, however, becoming evident throughout the 2007 lease term. A

2017 report confirmed the extent of the contamination. The damage and resultant waste that

caused the fair market value of the premises to decline was the result of the worsened state

of the TFM contamination. GSA failed to remedy this contamination or return the building

to its 2007 state before the lease expired in 2018.

GSA contends that the appellant’s inability to prove that the contamination occurred

during the 2007 lease precludes recovery for the appellant’s claims. The appellant, however,

has provided unrefuted testimony that the FWS continued to contaminate the building with

TFM during the 2007 lease period. Although GSA has questioned the testimony of the

appellant’s witnesses that such contamination occurred, it provided no testimony from FWS

to counter this evidence. “[T]he party opposing summary judgment must show an

evidentiary conflict on the record; mere denials or conclusory statements are not sufficient.”

Mingus Constructors, Inc., 812 F.2d at 1390-91. FWS, the building’s tenant for fifty years,

is in the best position to provide evidence as to the timing and level of contamination.

However, such evidence is missing from the record.

Because there was a material change in the condition of the building and premises,

beyond ordinary wear and tear, that injured the lessor’s interest, HG Properties A, L.P. v.

General Services Administration, GSBCA 15219, 01-1 BCA ¶ 31,376, at154,924, GSA

breached the implied duty not to commit waste, and the appellant is entitled to compensation

for this breach.

III.

Damages

A.

The Appellant’s Recovery is Limited to the Diminution

in the Fair Market Value of the Building and Premises

The appellant argues that, for breach of the covenant not to commit waste, it is entitled

to the cost of demolishing the building and parking lot, soil remediation, and construction of

a new parking lot and building. GSA contends that, in order to prevent a windfall, the

CBCA 6558, 7079

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appellant’s recovery must be limited to the diminution in the fair market value of the

property.

A breach of the implied covenant not to commit waste “requires restoration of the

premises to the lessor in the same condition as received, reasonable wear and tear excepted.”

Brooklyn Waterfront Terminal Corp v. United States, 90 F. Supp. 943, 949 (Ct. Cl. 1950);

see Bostwick, 94 U.S. at 65-66. There is an exception to the general rule, however, if an

award of restoration costs would give the appellant a windfall. Missouri Baptist Hospital v.

United States, 555 F.2d 290, 294-95 (Ct. Cl. 1977).

To recover the claimed amount, [lessor] must also demonstrate that the cost of

repairs of damages caused by the Government does not exceed the diminution

in the building’s fair market value that resulted from that damage. The

purpose of this rule is to avoid windfall recoveries. Missouri Baptist Hospital

v. United States, 555 F.2d 290, 294-95 (Ct. Cl. 1977). “[R]epair costs are

subjected to a ceiling. That ceiling is the diminution in fair market value

attributable to defendant’s breach.” Id. at 295; see also San Nicolas v. United

States, 617 F.2d 246, 249 (Ct. Cl. 1980); Dodge Street Building Corp. v.

United States, 341 F.2d 641, 645 (Ct. Cl. 1965); Banisadr Building Joint

Venture v. United States, 38 Fed. Cl. 392, 395 (1997); Adelaide Blomfield

Management Co. [v. General Services Administration, GSBCA 13125], 97-1

BCA [¶ 28,914,] at 144,145.

A&B Ltd. Partnership, 04-1 BCA at 160,506.

The appellant argues that San Nicolas and Grand Acadian, Inc. v. United States, 93

Fed. Cl. 637 (2010), require us to award the full cost of restoring the property to its pre-waste

condition and ignore the diminution in fair market value rule. Both of these decisions,

however, recognize that recovery for breach of the implied covenant not to commit waste,

absent a restoration clause in the lease that assigns the cost of restoration to the Government,

is limited to the diminution in fair market value. In Grand Acadian, the restoration clause

in the lease governed the Government’s damages owed for committing waste. Grand

Acadian, 93 Fed. Cl. at 641 (holding that “the diminution in market value rule is irrelevant

to the question of damages, because the terms of the lease agreement clearly establish that

. . . the government is contractually obligated to pay the full cost.”). The court in San

Nicolas also recognized that recovery “is limited to the diminution in fair market value in

cases where the defendant has breached the implied covenant not to waste the lessor’s

estate.” San Nicolas, 617 F.2d at 249. Since the 2007 lease does not include a restoration

clause, the appellant’s recovery for the waste committed by the Government in the building

and surrounding premises is limited to the diminution in fair market value ceiling.

CBCA 6558, 7079

B.

9

The Calculation of the Diminution

in the Fair Market Value Is Disputed

In order to limit a lessor’s recovery, the lessee must establish that the diminution in

fair market value is less than the lessor’s costs of restoration. KMS Development Co.,

GSBCA 12584-R, 97-1 BCA ¶ 28,968, at 144,260 (citing Three & One Co. v. Geilfuss, 504

N.W.2d 393 (Wisc. Ct. App. 1993); Ault v. Dubois, 739 P.2d 1117 (Utah Ct. App. 1987)).

GSA argues that the appellant is unable to meet its burden to show that the building suffered

any diminution of value during the 2007 lease. The appellant’s burden of proof for damages

for breach of the covenant not to commit waste, however, was satisfied when it presented

evidence of the costs of restoration. KMS Development Co., 97-1 BCA at 144,260. Because

GSA argues that the appellant’s true damages are not accurately measured by the costs of

restoration and that the appellant’s recovery should be limited by the diminution in the fair

market value of the property, the burden shifted to GSA to introduce evidence of diminution

in market value. Id.

“The fair market value of a piece of property is the price that an unrelated seller is

willing to accept and an unrelated buyer is willing to pay on the open market and in a bona

fide arm’s-length transaction.” A&B Ltd. Partnership, 04-1 BCA at 160,507 (citing

Riverside Research Institute v. United States, 860 F.2d 420, 423 (Fed. Cir. 1988);

Georgia-Pacific Corp. v. United States, 640 F.2d 328, 335 (Ct. Cl. 1980); Houser v. United

States, 12 Cl. Ct. 454, 472 (1987); Black’s Law Dictionary 1549 (7th ed. 1999)). The

diminution in value remedy is typically formulated as “the difference between the value of

the land before the injury and its value after the injury.” In re September 11 Litigation, 802

F.3d 314, 328 (2d Cir. 2015) (citations omitted). GSA contends that the damage suffered by

the building and premises during the 2007 lease was de minimis and insufficient to support

the appellant’s restoration damages or a diminution in fair market value. To determine the

diminution in fair market value, however, the parties should compare the fair market value

of the building and premises in 2007 and the fair market value in 2018.

GSA’s certified real estate appraiser valued the property in 2019, if uncontaminated,

at $570,000. Based on this valuation, GSA asserts that the building and premises suffered

a diminution in value of no more than $570,000. The appellant takes issue with this

valuation because it has not had the opportunity to review the appraiser’s conclusions or

qualifications. As a result, the fair market value of the property and the diminution in that

fair market value remain in dispute and cannot be resolved on summary judgment.

IV.

Lost Income

The appellant claims that it is entitled to lost income because of a reasonable

expectation that it would have continued to receive rental income from the Government had

CBCA 6558, 7079

10

the Government not left the property contaminated. The appellant contends that it expected

to rent the premises to the Government through at least 2028 and claims $2,755,145, which

includes a “reasonable extrapolation of rental payments, prior expense history, and standard

cost of living increases” for the ten-year period.

The test for lost profits requires the non-breaching party to establish, by a

preponderance of the evidence, that (1) its loss was the proximate result of the

breach, (2) the loss of profits caused by the breach was within the

contemplation of the parties because the loss was foreseeable or because the

defaulting party had knowledge of special circumstances at the time of

contracting, and (3) a sufficient basis exists for estimating the amount of lost

profits with reasonable certainty.

Michael Johnson Logging v. Department of Agriculture, CBCA 5089, et al., 21-1 BCA

¶ 37,904, at 184,092 (citing Energy Capital Corp. v. United States, 302 F.3d 1314, 1325

(Fed. Cir. 2002)). For lessors “to recover lost income as damages for a breach of contract,

the losses must be directly related to the contract that was breached.” Charles Engineering

Co. v. Department of Veterans Affairs, CBCA 582, 07-2 BCA ¶ 33,698, at 166,825. “Lost

profits are not recoverable if they result only from a contractor’s hope of additional

contracts.” Id.

The claim for lost income is based on the assumption that the Government intended

to lease the premises for ten more years but for the breach of the 2007 lease. A ten-year

follow-on lease, however, is too speculative to allow recovery of lost income. While the

appellant argues that it had a reasonable expectation that the Government would have

renewed the lease but for the breach, given that (1) the Government had rented the premises

for over fifty years and had continually adapted it to its own specific needs; (2) when the

2007 lease ended, FWS had to move their operations to multiple sites; and (3) the

Government sought a new building lease for 2020, GSA points to deposition testimony that

FWS was encouraged to build its own buildings, instead of hold ten-year leases, and

ultimately did so in Ludington to house the TFM and the FWS team. The appellant cannot

establish by a preponderance of the evidence that it lost ten years of rental income from the

Government as a proximate result of the breach. Lost income is not recoverable.

V.

Holdover Tenant

As an alternative theory of recovery to lost income, the appellant contends that it is

entitled to rent from GSA under a theory of constructive holdover tenancy for every year that

the building and surrounding premises remain contaminated, even though GSA has vacated

the property. GSA, conversely, maintains that because the 2007 lease does not contain a

restoration clause, the appellant may only recover money damages under the theory of waste.

CBCA 6558, 7079

11

“Longstanding precedent holds the Government liable for continued rent, as a

holdover tenant, during the time needed to restore leased property after it is vacated, at least

where that period is not unduly extended.” Kirk Ringgold v. Department of Agriculture,

CBCA 5259, 17-1 BCA ¶ 36,629, at 178,367 (citing Hoover v. United States, 3 Ct. Cl. 308,

311 (1867)). Here, the appellant is not entitled to compensation for GSA holding over

because the property is not being restored. Instead, the appellant is entitled to the remedy for

breach of the covenant to commit waste, which is money damages. We have found no

authority to support a claim that waste gives rise to a holdover tenancy as well. Moreover,

the length of the holdover tenancy is too speculative, never-ending, and unduly extended.

Cf. Hoover, 3 Ct. Cl. at 311 (calculating the holdover tenancy as the time it takes to restore

the property); WRD Venture LLP v. General Services Administration, GSBCA 16179, et al.,

05-1 BCA ¶ 32,807, at 162,352 (2004) (granting six and three-quarters months of rent during

restoration); Richard & Terry Ponce, DOT BCA 2039, 90-1 BCA ¶ 22,517, at 113,011

(1989) (granting three months and one week of rent during restoration). Thus, GSA is not

liable for rent for an incalculable and extended amount of time under a theory of a

constructive holdover tenancy.

Decision

The appellant’s motion for summary judgment is GRANTED IN PART as to

entitlement to damages for GSA’s breach of the covenant not to commit waste in the building

or surrounding premises. GSA’s motion for summary judgement is GRANTED IN PART

as to the appellant’s claim for lost income and holdover rent and the measure of damages for

the appellant’s claim of waste. The issue of the fair market value of the property and the

diminution in that value remains to be decided.

Erica S. Beardsley

ERICA S. BEARDSLEY

Board Judge

We concur:

H. Chuck Kullberg

H. CHUCK KULLBERG

Board Judge

Marian E. Sullivan

MARIAN E. SULLIVAN

Board Judge